"My ultimate opinion is that the split was rooted in the cultures of consulting and audit," said Dan Sautner, chairman of Athens, Ga.-based Padgett Business Services, a 300-unit chain of accounting offices. "Auditors work toward the long-term relationship with the client. Consultants are transaction-based, performing the work of the project, completing and moving on."

Allan Boress, a sales and marketing consultant to CPA firms, agreed by saying, "This was a doomed relationship from the beginning as the accountant/auditor mentality is the exact opposite of the intellect needed to build and create a consulting juggernaut."

The doomed relationship between accounting giant Arthur Andersen and its consulting arm, Andersen Consulting came to a rest Monday when Colombian arbitrator Guillermo Gamba issued a 129-page decision, splitting up the two entities.

The decision forces Andersen Consulting to abandon the Andersen name and pay about $1 billion to the partners at Arthur Andersen. That money, which consists of regularly scheduled payments between the firms, has been stored in escrow since the arbitration began in December 1997.

Andersen Consulting executives said they have not yet decided on their new identity, which will cost about $100 million to register and establish.

The arbitrator also ruled that Andersen Consulting must relinquish any technology jointly held by the firms, but Andersen Consulting dodged a $14 billion payment that could have been awarded under the contract between the two firms.

Conrad Giedt, a CPA at Los Angeles-based C.D. Geidt & Co., agreed that conflict between auditors and consultants is nothing new and warns that conflict strikes not just giants like Arthur Andersen. He said smaller firms should "watch out."

"Many small firms have always had trouble with the consultant business because at small firms there was never enough money and profit to justify the consultants. This of course is all changing," explained Giedt. "All CPAs need to separate the consultancy and the audit and tax practice at least into separate business units."

August Aquila, vice president of American Express Tax & Business Services and a noted speaker and author on marketing for accountants, said, "The breakup of Arthur Andersen and Andersen Consulting, albeit on a much larger scale, is not uncommon in the accounting profession. There are several examples of smaller firms that open a branch office and after a few years the two offices separate."

"It appears that when things are going well, one office feels that it is giving the other everything," added Aquila. "A corporate structure would surely solve this problem."

Mark Zivin, a CPA at Business Productivity Systems, the technology consulting unit of Chicago-based Morrison & Morrison, agreed. "Similar issues could arise in the other Big Four as well as smaller accounting firms that remain in the tech arena," Zivin said. "It could also potentially affect the new 'one-stop-shopping' firms that offer other value-add services, where the fruits of the labor are not relatively equitably divided."

However, taking a more optimistic stand is Gordon Gilchrist, a London, England-based consultant to professional services firms in the U.S., the U.K. and South Africa, who said, "In the smaller firms we have success stories especially with IT consultancy and financial services and we have been able to advise clients from the outset that the structure of these types of 'add on' services must be outside the domain of the existing auditing and accounting practice. Otherwise, we see the accountants and consultants 'clashing' and ultimately failing."

What advice do some professionals have for Arthur Andersen?

Gilchrist advises that, "AA 'sell' their good name (AC) as a brand/franchise to their internal consultants and build up another great consultancy -- this time knowing that they will not get along and, therefore, creating a structure that allows both businesses to grow."

Boress predicts that Arthur Andersen may soon merge or acquire one of the other Big Five firms. But it is not a prediction he hopes rings true. "I would recommend they do not do that as it would infect their carefully created culture with people who are not of the same mind. In the end AA will grow and succeed and likely be No. 1 again because they are Arthur Andersen," explained Boress.

"My advice would be to get over it as quickly as possible and look at other forms of business association," said Padgett's Sautner. "Since the leadership of both companies are now gone, the new leaders should be able to look to the future. In the name of good business they should try to work towards some form of alliance that, while benefiting both, does not impinge on either."

Sautner's conclusion: "Consulting and auditing, a marriage made in hell."

-- By Antoinette Alexander and Rick Telberg

Can consultants and auditors ever get along? Send comments to information@smartpros.com.